International Management Governance and Sustainability

Name

Institution

Course

Professor

Date
 Introduction

Corporate governance is the term used to describe the collection of guidelines that

must be followed to maintain control over a corporation's commercial operations. Corporate

sustainability, often known as corporate sustainability, is achieved by organizations through

good governance practices. The sustainability of a company is directly impacted by corporate

governance. The governance and sustainability of a corporation are shown by its international

management practices. Market dominance is mainly a result of sustainable development.

According to Francois Henri Pinault, sustainable development is a pivotal shift that can

completely reorganize the playing field. For the simple reason that businesses are going to

rule the market. The Rana D case study on Tesco's social responsibility (Rana, 2007) is taken

into consideration when evaluating the Tesco company and benchmarking its practices

against the UN Global Compact. This analysis of the company aims to highlight the

importance of global management and governance for more ethical business practices.

With its corporate headquarters in Welwyn Garden, England, Tesco is a global British

company that sells groceries and other items. According to gross sales, the firm is the third-

largest retailer in the world. Considering Tesco's governance structure, the board consisted of

eight executive directors as of February 28, 2009. Following David Reid, the non-executive

chairman, there are seven independent non-executive directors. The company's articles of

association provide that stakeholders must elect new directors within a year of their

appointment. Senior independent directors of the corporation assist shareholders in resolving

issues and evaluating the chairman's performance when communication channels are

ineffective. The board connects the managers who oversee the company's daily operations

with shareholders ( Nigam et al. (2018), pp. 571–585).

In the Tesco firm, there is a balance between executives and non-executives. The

business complies with the combined code, ensuring that executives act in the stakeholders'

best interests. Tesco complies with the unified code, which requires that the board make sure

that at least half of its members are non-executive directors (Shrives & Brennan, 2017, pp.31-

56). Cadbury suggests that a single individual should not hold the dual positions of
chairperson and CEO. It results in an imbalance of power between the chairman and chief

executive officer, which is the root of several disasters in the global financial sector. The

chairman and chief executive officer of Tesco are two distinct individuals, with the chairman

overseeing the board. In contrast, the group's activities are managed by the chief executive.

The combined code provides guidelines on how the board should run businesses,

ensuring good governance practices. Due to the resignation of two Tesco non-executives for

conflicts of interest, there are now more executives than non-executives. To comply with the

UK unified code, the business needed to address this as soon as feasible. The company's

nominations committee supervises the board appointments.

Directors must attend board meetings unless other obligations prohibit them. They

provide their views in advance when scheduling issues prohibit them. Tesco has been

classified as the organization with the worst corporate governance by the IR magazine. The

management practices of Tesco will be analyzed in the article and compared to a third-party

standard while highlighting the significance of global management, governance, and

sustainability. The governance structure of Tesco is shown in the figure below (Dudovskiy,

2017).

The third-party criteria considered for the assessment is the UN Global Compact. The

UN Global Compact is a non-binding organization that entices companies everywhere to

adopt sustainable and socially conscious practices and monitor their implementation. The UN

Global Compact promotes an environment of integrity in plans and actions. An organization

needs the commitment of its leading executives to participate in the UN Global Compact.
Organizations should provide yearly reports or communicate to demonstrate their efforts to

conduct business ethically and serve society since the company is also built on responsibility

(Fussler & Van, 2017). The operations of the UN Global Compact are founded on ten

fundamental principles.

The four areas of human rights, labor, the environment, and anti-corruption form the

basis of the ten principles (Xie et al., 2019). There are two principles related to human rights.

The first declares that companies must uphold and uphold internationally recognized human

rights, and the second says that they must refrain from engaging in any conduct that violates

those rights. There are four principles related to working. They include companies upholding

the right to collective bargaining and the freedom of association, banning child labor,

outlawing forced labor, and banning discrimination in employment and profession. There are

three principles related to the environment. When creating technology, it is essential to

maintain a cautious attitude to environmental problems, take steps to encourage greater

environmental responsibility, and promote friendliness. The final rule specifies that

companies should combat corruption in any manner, including bribery and extortion.

Today's investors and consumers are more knowledgeable than ever, and they want

businesses to take responsibility for the mounting burden on the world and its inhabitants

(Lusardi & Mitchell, 2017, p.1750008). People are becoming more aware that firms must put

more effort and caution while pursuing temporary advantages. Natural calamities like floods,

societal instability, and economic inequality may destroy long-lasting effects. Businesses that

understand this well and are taking action will be in a better position and be farther ahead of

those that do not. On January 1st, 2016, the 17 UN Sustainable Development Goals of the

2030 Sustainable Development Agenda went into effect. The illustration below is from

Dreamstime and depicts sustainable development objectives (Goerge et al., 2021). George

makes an effort to demonstrate digital entrepreneurship and sustainability.

 The sustainable development agenda, according to the UN Global Compact website,

gives businesses throughout the globe access to new markets and possibilities. To achieve

worldwide objectives, firms must be created. According to the UN, global compact

corporations must play a part in averting international financial crises like the one in 2008 by

working with investors to promote transparency in their financial operations and social and

environmental issues. According to the UN global compact website, investors can assess a

company's performance on environmental, social, and corporate governance concerns.

Issues like water, human rights, anti-corruption, and climate change may impact the

value of enterprises. Businesses that have ESG concerns under control will probably do well

financially over the long run. The UN Global Compact assists many organizations in

promoting sustainable development (Fussler et al., 2017). Companies are the first group, and

by encouraging them to take part in their operations and investments, they can analyze and

manage ESG risks. Investors make up the second category and are assisted in deciding

whether to include ESG risks in their investments. The stock market, which created sustained

stock exchange efforts, is the last category. The UN Global Compact has created several

frameworks that businesses may use to integrate sustainability into their plans.

The case study cited in the report claims that Tesco's CR approach allowed Tesco to

create global management standards compatible with the UN's sustainable development

objective. The business built its management methods on consistently giving back to the
neighborhood, purchasing and selling goods ethically, caring for the environment, offering

clients healthier options, and fostering successful careers and employment. Even though the

corporation used these principles as the foundation for its worldwide activities, it still needed

to include how they were supposed to contribute to guaranteeing sustainable development.

Tesco created a strategy to spread the practice to other nations in 2009 and carbon

labeled 100 of its brand-name items in Ireland and the UK. This was done to help the

environment. The business reduced its carbon footprint by 70% and planned to develop more

outlets using the same model. Tesco took action by introducing biofuel at its gas stations and

doing a study on the subject with the help of Manchester's Sustainable Consumption Institute

(Ahmed, 2017). The business made a concerted effort to use less plastic in packaging its

goods. Despite executing sustainable growth plans, the corporation did not address group

water consumption (Apte & Sheth, 2018). Tesco Company is attempting to achieve

sustainable development by comparing its actions to the UN Global Compact's principles and

sustainable development strategy. The case study outlines Tesco's global environmental

management procedures in detail.

The business has also made community-focused efforts. It created 250 shop

community champions in nations like South Korea, China, and Malaysia. By introducing its

community pledges, the corporation demonstrated to its staff how they could make a

difference. The business collected 6.2 million sterling pounds to benefit UK charities and

Marie Curie's cancer treatment. According to Rana's case study, the corporation has

supported and improved the communities while constructing 951 Korean cultural centers.

The company's activities demonstrate how it incorporates sustainable development into its

operations and investments.

Tesco keeps up with initiatives regarding moral and accountable corporate practices.

The corporation hired 726 qualified auditors from 11 auditing organizations to audit its

international supply chain. According to the case study, 90% of Tesco's suppliers worldwide

are satisfied with how respectfully Tesco handles them. According to the evidence in the case
 study, Tesco is adhering to the principles of the UN Global Compact. The business does not

abide by those who violate human rights.

Total Surplus: 71178 t/y (unit of flow)

The case study claims that the company is focused on fulfilling customer

requirements. The launch of Tesco's loyalty Clubcard demonstrates its commitment to

ensuring customer pleasure.

Tesco has received several complaints concerning the unfair treatment of employees

concerning its labor practices. The case studies provide examples of employees' grievances in

South Africa and Bangladesh. According to the allegations from the employees, Tesco does

not adhere to the labor standards of the UN Global Compact.

Tesco has significantly influenced consumer choice and health (Johnson et al.,

pp.179- 188). According to the case study, the firm lowered the amount of salt and saturated

fat in their goods. The business is constantly establishing standards for nutritional labeling in

collaboration with the government, health groups, and business entities. The company is

significantly contributing to the UN's objective for sustainable development. The company

has made considerable headway in advancing its sustainable development strategy. In only

one year, Tesco reduced in-store waste by a third. The following material flow diagram was

created using information from Tesco (Yang et al.,2019).

Tesco provided the information used to create the flow diagram, which shows Tesco's efforts

to support sustainable development. Despite the company's efforts to promote sustainable

development, more may be done to accomplish more. The business might take part in healthy

eating activities. Tesco should control the amount of salt and sugar in foods while enhancing

the nutritional value of such meals. The effort will advance sustainable development while

also assisting in health improvement. To have a beneficial influence on climate change, the

business should provide its clients with ways to access its low-carbon goods and services. By

comprehending a product's carbon footprint, the corporation may cut emissions across its

supply chain. The corporation should also guarantee that its workers have acceptable

working conditions and prevent situations when workers in Bangladesh complain about their

wages.

Even while the corporation has made significant strides in some environmental regions, it

should continue to work on a long-term strategy to reduce carbon emissions. The business

should lessen its environmental impact as it grows. Tesco should put the Kyoto Protocol and

national renewable energy goals into practice. Despite seeming well-run, the organization

lacks transparency and has poor internal control. The business should make an effort to

combat this. Failing to fulfill sustainability objectives and engage in ethical business

practices results from poor cooperative governance.

Conclusion

Two variables influence the success of a company—transparency in business dealings and

moral conduct. According to the case study, benchmark, and assessment, Tesco operates a

sound corporate governance structure. The corporation guarantees investor openness, which

leads to solid corporate performance. Tesco's continuous growth is thanks in part to its

exemplary corporate governance. Tesco has put various programs into place to ensure the

UN worldwide compatibility criteria are followed. Tesco has increased its commitment to

responsible business by using the most substantial corporate governance procedures. Because

effective corporate governance has a favorable influence on sustainable development, there

have been more advancements in this area. Tesco's annual report to the UN Global Compact

clearly explains its efforts to support sustainable development, but as the suggestions show,

more may be done.

 References

Ahmed, S., 2017. Project Title: Implementation of Industrial Symbiosis for the minimisation

of energy use through industry network formation.

Apte, S. and Sheth, J., 2018. 3. Collaborating with Customers. In The Sustainability

Edge (pp. 49-69). Univrsity of Toronto Press.

Dudovskiy, J., 2017. Impact of communication technology on businesses.

Fussler, C., Cramer, A. and Van der Vegt, S., 2017. Raising the bar: Creating value with the

UN Global Compact. Routledge.

Fussler, C., Cramer, A. and Van der Vegt, S., 2017. Raising the bar: Creating value with the

UN Global Compact. Routledge.

George, G., Merrill, R.K. and Schillebeeckx, S.J., 2021. Digital sustainability and

entrepreneurship: How digital innovations are helping tackle climate change and

sustainable development. Entrepreneurship Theory and Practice, 45(5), pp.999-1027.

Hashim, M., Nazam, M., Abrar, M., Hussain, Z., Nazim, M. and Shabbir, R., 2021.

Unlocking the Sustainable Production Indicators: A Novel TESCO based Fuzzy AHP

Approach. Cogent Business & Management, 8(1), p.1870807.

Ismail, I.N., 2017. The Roles of Corporate Governance and its Influances on Risk and

Performance: Tesco Plc.

Johnson, S., Robertson, I., Cooper, C.L., Dickinson, J. and Jones, N., 2018. Tesco Bank

Wellbeing Case Study. In WELL-BEING (pp. 179-188). Palgrave Macmillan, Cham.

Lusardi, A. and Mitchell, O.S., 2017. How ordinary consumers make complex economic

decisions: Financial literacy and retirement readiness. Quarterly Journal of

Finance, 7(03), p.1750008.

Maisashvili, T., 2020. Global Corporate Social Responsibility and Policy Evolution in the

Garment Industry: A Case Study from Bangladesh Using a Multiple-Streams

 Approach and Punctuated Equilibrium Theory.Nigam, N., Benetti, C. and Mbarek,

S., 2018. Can linking executive compensation to sustainability performance lead to

a sustainable business model? Evidence of implementation from enterprises around

the world. Strategic Change, 27(6), pp.571-585.

Ng, K.S., Yang, A. and Yakovleva, N., 2019. Sustainable waste management through

synergistic utilisation of commercial and domestic organic waste for efficient resource

recovery and valorisation in the UK. Journal of Cleaner Production, 227, pp.248-262.

Shrives, P.J. and Brennan, N.M., 2017. Explanations for corporate governance non-

compliance: A rhetorical analysis. Critical Perspectives on Accounting, 49, pp.31-56.

Voss, H., Davis, M., Sumner, M., Waite, L., Ras, I.A., Singhal, D.I.V.Y.A. and Jog, D., 2019.

International supply chains: compliance and engagement with the modern

slavery act. Journal of the British Academy, 7(s1), pp.61-76.